US president Donald Trump meets Japanese business leaders at the US ambassador's residence in Tokyo © Reuters
Monday 08:40 GMT
What you need to know
- Trump complains about US-Japan trade deficit
- Yen under pressure as investors track US president’s tour of Asia
- Energy stocks rise as oil hits fresh two-year high
- European equities steady in opening trade
- Investors look to service sector data to track eurozone recovery
Leading quote
“A strong economic backdrop should both reduce anti-euro political sentiment and support continued gains for European equities, which are currently enjoying double-digit earnings growth,” says Mike Bell, global market strategist at JPMorgan Asset Management.
“The service and composite purchasing managers’ index surveys today are expected to show that eurozone growth remains healthy and broad based. Eurozone consumer confidence is at the highest level since 2001 and unemployment continues to fall rapidly.”
Hot topics
The yen is under pressure after US president Donald Trump made complaints about US-Japan trade as his tour of Asia got under way, while oil prices are higher with investors tracking an anti-corruption crackdown from the government in Saudi Arabia.
The yen weakened as much as 0.6 per cent to an intraday low of ¥114.73 per US dollar, its lowest since March 15, after Mr Trump complained about the US-Japan trade relationship while in Tokyo for the first stop of his tour of Asia. It has since regained some support to weaken 0.2 per cent on the session.
According to newswires, President Trump told a gathering of Japanese business leaders that US trade with Japan was “not free and not reciprocal, but I know that it will be”, and complained that the US had experienced “massive trade deficits” with Japan.
Meanwhile, oil traders are digesting a new political risk factor after a purge in Saudi Arabia — the world’s second-largest crude producer and the biggest crude exporter — but analysts said there was unlikely to be any change in oil policy ahead of a meeting this month of energy officials inside and outside Opec.
Brent crude oil, the international benchmark, is up 0.6 per cent at $62.47 a barrel, its highest level since July 2015. West Texas Intermediate, the US marker, is up 0.4 per cent at $55.86.
Forex and fixed income
The dollar is finding support, with the index measuring the world’s reserve currency against a basket of peers flat at 94.292, erasing an earlier 0.1 per cent rise.
The euro is also steady at $1.1611, with the pound up 0.1 per cent at $1.3081. Against the euro, the pound is steady at £0.8875.
The New Zealand dollar is down 0.1 per cent at $0.6898 and the Australian dollar was 0.1 per cent higher at $0.7655. The South Korean won was flat at Won1,115.7, while in China the onshore renminbi weakened 0.1 per cent to Rmb6.633 against the dollar.
In debt markets, the US 10-year US Treasury yield is down 0.7 basis points at 2.338 per cent, while that on the Japanese equivalent is down 2.1 bps at 0.023 per cent.
Equities
European equities are trading steadily ahead of the data due out later in the morning. The region-wide Euro Stoxx 600 is flat, as is London’s FTSE 100. Frankfurt’s Xetra Dax 30 is down 0.2 per cent.
Asia equities started the week on a poor footing, with the region’s main bourses mostly lower.
In Hong Kong the Hang Seng index is flat. The Kospi Composite in Seoul is 0.3 per cent lower while in Sydney the S&P/ASX 200 is off 0.1 per cent — though energy stocks bucked the trend as the price of oil rose. The Topix in Tokyo is down 0.1 per cent.
In China, the Shanghai Composite has turned round from earlier losses to rise 0.5 per cent.
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